ODONE v. MARZOCCHI.
Plaintiff brought this action to recover certain money and real property transferred by his wife, shortly before her death, to defendant. Defendant appeals from a judgment in plaintiff's favor.
Respondent, Giacomo Odone, and the decedent, Maria Odone, were married in France in 1928, and immediately thereafter came to San Francisco where they lived together until Maria's death. There is no evidence that either the husband or wife owned any property at the time of their marriage, or received any thereafter by gift, bequest, devise, or descent. During the marriage Maria handled the family earnings, respondent testifying that he turned over his pay checks to her, and that she ‘managed everything.’
On July 3, 1944, Maria purchased, for $1,300, a piece of improved real estate in San Francisco. The deed was made out to Maria Odone and recited that she took title as her separate property. On July 14, 1944, respondent, Giacoma Odone, executed a deed quitclaiming this property to Maria. Respondent offered no explanation as to why he executed this deed. Both deeds were recorded on August 2, 1944. Maria apparently paid for the property with funds she had saved from the combined earnings of herself and her husband. The property was, therefore, purchased with community funds.
Appellant, Peter Marzocchi, had known respondent before the latter's marriage to Maria. After the marriage he was a frequent visitor at the Odone home, and became the friend of both respondent and Maria. He also employed respondent at various times in his business. Maria, who had lost whatever affection she once had for her husband, and who believed that he had treated her shamefully, consulted her most trusted friend, Marzocchi, as to the advisability of buying the real estate involved in this case. After the purchase, at her request, he did a considerable amount of repair work on the house on the property.
In November of 1945 Maria became seriously ill. She asked appellant to make arrangements for her to see a physician, which he did. The doctor advised immediate surgery. Appellant testified that previous to this time he and Maria had discussed various means of reimbursing him for the work he had done on the house, one such agreement being that if she sold the house at a profit she would repay appellant and devide the profit with him. However, when Maria became ill, she decided, according to appellant, to give the property to him. On November 26, 1945, she executed a deed to him which recited a consideration of $1,800. Appellant testified that this was the amount Maria felt the property to be worth. At the same time, appellant signed and acknowledged a deed reconveying the property to her with the understanding that the deed would be kept by their attorney and delivered to Maria if appellant predeceased her. The deed from Maria to appellant was recorded on December 15, 1945.
An hour before Maria went to the hospital on December 16, 1945, she gave appellant a packet of bills which she told him contained $5,400. He testified that she said at that time: ‘Here's the money, I give it to you and I want you to do all you can for me, pay all the bills, and what is left, you will return it to me, and if I should die, you keep it for yourself.’ Twelve days later, Maria, while in the hospital, signed a written instrument which reads as follows: ‘December 28, 1945. I, Mary Odone, declare that I have made a gift, in case of my death, to my friend, Peter Marzocchi, of Fifty Four Hundred Dollars ($5400.00) in cash which I want him to have for his own in case I should die. If I recover my health, he will return it to me. Maria Odone.’ The same agreement was set forth in Italian on the bottom of the page, and was signed by Maria. Maria died on January 5, 1946, eight days after signing this instrument. Testimony of both respondent and appellant, as already indicated, was to the effect that Maria had long felt no affection for her husband; that she considered he had treated her shamefully, and that she looked upon Marzocchi as her most trusted friend and advisor. The evidence was undisputed that, while she was in the hospital, she asked that respondent be kept away from her, refused to see him, and refused all his requests to turn over money to him, stating that she wanted appellant to handle all her affairs. Marzocchi attended Maria until her death, carried out her instructions as to her funeral arrangements, and paid her medical and burial expenses out of the money she had given him.
Respondent's original complaint alleged (1) that he was the owner of an undivided one-half of the real property involved here; that Maria had no right or title to more than an undivided one-half of the property, but that she had, without his consent, conveyed the whole of the property to appellant; that the value of said property was $3,000, so that appellant was indebted to respondent in the sum of $1500; (2) that appellant was indebted to respondent in the sum of $5,400 for money had and received; wherefore, he prayed judgment for $6,900. Appellant denied these allegations, and, as a separate defense, alleged that the real property was the separate property of Maria Odone, until she conveyed it to him for a valuable consideration. Before trial he filed an amended answer and cross-complained to recover from plaintiff rent for the occupancy of the property from the time of Maria's death at the rate of $20 a month. During the latter part of the trial, counsel for respondent attempted unsuccessfully to elicit testimony from appellant that the deed from Maria to himself was given as security for the debt incurred for his services in repairing the house. After the trial he sought and obtained leave to amend the complaint, by alleging that respondent was the owner of the entire title to the real property; that Maria had no right or title to the property; that the deed whereby Maria purported to convey the same to appellant was given without his consent and was void. He prayed that appellant be required to execute a deed to respondent. Appellant answered denying any indebtedness to respondent, and denying that he had ever received more than $5,000 from Maria. He alleged that the real property had been the separate property of Maria, and that there was no evidence to support a contention that respondent is or ever was the owner of the real property.
The trial court found: (1) That appellant became indebted to respondent in the sum of $5,400 for money had and received for the use and benefit of respondent; (2) that appellant is entitled to a credit of $1,800 out of the sum of $5,400 to cover expenditures made by defendant for funeral and burial expenses of Maria Odone, and for expenses incurred ‘in and about certain real property owned by said plaintiff and said Maria Odone’; (3) that respondent is the owner and entitled to the possession of all the real estate; (4) that Maria had no right or title to the real property; (5) that without respondent's consent appellant obtained a conveyance of the property from Maria who had no right or power to execute the conveyance; (6) that the deed whereby Maria purported to convey to appellant is void, and that appellant should be required to execute a deed to respondent covering the entire interest in the property. It was adjudged that respondent was entitled to recover $3,600 with interest from December 16, 1945, and that he was the owner in fee simple absolute of the real estate.
The main contentions of appellant are that under the undisputed evidence the real property was the separate property of Maria, and that Maria made valid gifts of this property and of the money to him. It is urged that the contrary findings are totally unsupported.
The contention of appellant that under the evidence the real property, as a matter of law, was the separate property of Maria must be sustained.
Section 164 of the Civil Code provides that whenever any property is acquired by a married woman by an instrument in writing it is presumed to be her separate property. This presumption was reinforced, in the instant case, by the recitation in the deed that it was Maria's separate property, and by the quitclaim deed made out to her by her husband. It is well established that a husband and wife may contract with each other regarding their property, and may change the status of such property from community to separate property by agreement. Rothschild v. Davis, 217 Cal. 660, 20 P.2d 329; Siberell v. Siberell, 214 Cal. 767, 7 P.2d 1003; Thomas v. Hoffman, 122 Cal.App. 213, 9 P.2d 538. It is also clear that a husband may make a gift of community property to his wife, and, after making such a gift, it thereby becomes her separate estate. Alferitz v. Arrivillaga, 143 Cal. 646, 77 P. 657; Ballinger v. Ballinger, 9 Cal.2d 330, 70 P.2d 629. When a deed is made to the wife as her separate property and the husband concurrently executes a quitclaim deed to her, and the husband offers no explanation as to why the quitclaim was executed, this conclusively establishes the nature of the property as her separate property. The rule is stated in Miller v. Brode, 186 Cal. 409, at page 411, 199 P. 531, 532, as follows: ‘[T]he deed by which the ranch was acquired conveyed it to the decedent as sole grantee, and described it as her separate property, and was so made with the consent of her husband, who participated in the transaction. This definitely establishes the character of the property as her separate property. * * * But where, although the property is purchased with community funds, it is conveyed to the wife with the husband's consent by a deed expressly describing it as her separate estate, it is as if the husband himself had conveyed community property to her by deed expressing that she took it as her separate estate. Such a conveyance would be nothing more nor less than an express gift by the husband to the wife of community property. [Citing cases.] There is no impediment to a husband making such a gift if he desires, and if he does it the property at once becomes the wife's separate property, and the effect of the conveyance in this respect cannot be avoided except by avoiding the conveyance itself. This, of course, cannot be done except for fraud, mistake, or some similar ground. In the absence of some such ground for setting aside the transaction it is wholly immaterial that the property was community property before the husband conveyed it to the wife, or, in case it were conveyed to her by a third person, that the consideration given for it was community property. Its character is changed at once by the conveyance to the wife as her separate property either by the husband directly or by a third person with his consent. Furthermore, except for the purpose of showing fraud or some other ground for setting aside the transaction, evidence that the husband did not intend that the property should become the wife's separate property is wholly inconsequential, since such evidence is but a denial of his intent as expressed in the deed, and that expression of intent is final.’ (Italics added.) This rule has been reaffirmed in Dale v. Dale, 87 Cal.App. 359, 262 P. 339; Donze v. Donze, 88 Cal.App. 769, 264 P. 294; O'Melia v. Adkins, 73 Cal.App.2d 143, 149, 166 P.2d 298. There was no attempt by respondent to establish that the deed from the prior owners to Maria or his quitclaim deed to Maria in 1944 was obtained by fraud, mistake, or undue influence. This property, therefore, under the facts clearly became and remained the separate estate of the decedent. This estate she could convey, of course, without the consent of her husband. Civ.Code, § 162. There was no evidence whatsoever to support the trial court's findings that Maria had no inferest in the real estate; that her deed to defendant was void, and that defendant had no interest in the property. The findings on this issue cannot stand in view of this state of the record. The evidence, and the reasonable inference therefrom, are in conflict, however, as to whether Maria made an absolute gift of this real property to appellant, or merely gave him the deed as security for his work done on the property. This issue must be retried.
The court also found ‘that the said defendant is entitled to credit for the sum of one thousand eight hundred (1,800) dollars on account of said sum of five thousand four hundred (5,400) dollars to cover various expenditures made by said defendant in and about the funeral and burial of Maria Odone, the deceased wife of said plaintiff, and in and about certain real property owned by said plaintiff and said Maria Odone.’ This finding is also unsupported. Maria's deed to appellant recited a consideration of $1,800. Appellant testified that the money and labor he spent on the premises amounted to $2,000. There was no contradictory evidence except for respondent's testimony: ‘He did very little work on it. He made me do the work, an old man like myself, and he would go to sleep.’ Appellant testified that he paid various sums for Maria's medical and burial expenses, and receipted bills were introduced into evidence to confirm his testimony. This evidence was not contradicted in any manner. The trial court's finding as to the amount of the credit to which appellant was entitled was clearly erroneous. Furthermore, the recital that the property was ‘owned by said plaintiff and said Maria Odone’ is in conflict with the finding that Maria had no interest in the property, and is erroneous in view of the fact that it was Maria's separate estate.
As to the gift of money, appellant first contends that the trial court erred in determining that he received $5,400 from Maria. He asserts that he actually received only $5,000, but that he did not discover this until he counted the money for the first time about a week after Maria's death. This, however, was a question of fact to be determined by the trial court. In view of the writing signed by Maria in the hospital reciting that she had given $5,400 to appellant, the court's finding must be upheld.
But the next contention of appellant in reference to the money is more meritorious. He urges that the evidence showed conclusively a gift causa mortis of the money, valid either as to the whole, if it be considered the separate property of the wife, or valid as to half, if the money constituted community property of the husband and wife. There is no legal basis for holding the funds to be Maria's separate property, inasmuch as such funds were admittedly derived from the earnings of the husband and wife during marriage, and there is no evidence of a gift of such funds by the husband to his wife. Civ.Code, § 164. The mere entrustment of the management of the earnings to the wife would not change the character of the property. To effect such a change there must be a definite agreement between the spouses. There is no evidence of such an agreement.
The funds, therefore, must be treated as community property. The question is whether the wife could make a valid gift of all or part of such funds to appellant with out her husband's consent. Appellant urges that a gift causa mortis is a testamentary act within the meaning of Probate Code, § 201, which allows each spouse to make a ‘testamentary disposition’ of half the community property. Respondent contends that such a disposition can be made only by a ‘validly executed and published last will and testament.’ The essential elements of a gift causa mortis were present in this case, i. e., it was made in view of the donor's death, the donor died of the ailment or peril which she feared at the time of the gift, and there was delivery and acceptance during the life of the donor. Barham v. Khoury, 78 Cal.App.2d 204, 177 P.2d 579. A gift causa mortis partakes of the nature of both a gift inter vivos and a legacy. In IV Page on Wills, Lifetime Ed., p. 744, § 1660, it is said:
‘The courts have differed with reference to the proper classification of a gift causa mortis; but this difference is not due to a difference as to the facts which are necessary to make such a gift, or as to the legal consequences which follow; but rather as to the proper nomenclature to apply. It has been said that a gift causa mortis is essentially testamentary; that it is ‘amphibious between a gift inter vivos and a legacy’; that it has a number of characteristics which make it like a testament, since it is made in contemplation of death, and is not a finality since the donor may revoke it or it fails if the donor recovers.
‘At the same time there are marked differences between a gift causa mortis and a testament * * *. In a testament, delivery of the legacy to the legatee would be meaningless and without effect. In a gift causa mortis delivery is essential to its validity.’
We do not have to decide whether a gift causa mortis is or is not a ‘testamentary disposition’ as those words are used in § 201 of the Probate Code. This is so because the law is well settled in this state that a gift inter vivos or causa mortis by a husband of community property, without his wife's consent, if not set aside, during the husband's lifetime, at his death becomes valid as to one-half of such gift. Dargie v. Patterson, 176 Cal. 714, 169 P. 360; Trimble v. Trimble, 219 Cal. 340, 26 P.2d 477; Britton v. Hammell, 4 Cal.2d 690, 52 P.2d 221; Ballinger v. Ballinger, 9 Cal.2d 330, 70 P.2d 629; In re Estate of McNutt, 36 Cal.App.2d 542, 98 P.2d 253; Travelers' Ins. Co. v. Fancher, 219 Cal. 351, 26 P.2d 482; Bank of America etc. Ass'n v. Hazelbud, 21 Cal.App.2d 109, 68 P.2d 385. In Britton v. Hammell, supra, the court expressed the rationale of these cases as follows, 4 Cal.2d at page 692, 52 P.2d at page 222: ‘The case of Trimble v. Trimble, supra, and other decisions holding that recovery in such case is limited to one-half the property, must rest, ultimately, upon the theory that the husband had the right, at his death, to give away one-half by will; and that his gift before death, if limited, in effect to one-half the property transferred, could be viewed as the equivalent of a provision by will.’ There is no logical nor legal reason why the rule of these cases should not equally apply to gifts of community property made by the wife without her husband's consent. The fact that the husband has legal power of management and control of the community personal property (§ 172, Civ. Code), is of no significance in the solution of this problem because his power to make a gift of such property, which upon his death becomes valid as to one-half, springs not from his power of management and control, but from his power of testamentary control over one-half of such property. The wife, of course, possesses equal testamentary power with her husband over community property, and may, upon her death, will away one-half of such property. § 201, Probate Code. Under the provisions of § 161a of the Civil Code the respective interests of the husband and wife in community property are ‘present, existing and equal.’ If a gift of the community property by the husband without the wife's consent, upon the husband's death is the ‘equivalent of a provision by will,’ then a gift by the wife of such property without her husband's consent, although voidable by the husband during his wife's lifetime, upon her death is also the ‘equivalent of a provision by will.’ There should not and cannot be any discrimination in the effect given to similar conduct by the spouses in relation to gifts of community property. The voidable gift became valid as to one-half of the money involved upon the death of the wife.
Appellant next contends that if the money be found to constitute community property, the expenses of the last illness and funeral should be a charge against the one-half as to which decedent had no testamentary power, that is, the husband's share, because, so it is contended, it is the husband's duty to pay these expenses. Medros v. Kohn, 68 Cal.App. 367, 229 P. 873, is relied upon to establish this proposition. That case did hold that it is the duty of the husband to pay such expenses, but that case was not concerned, so far as the opinion shows, with the liability of community property for such debts. Probate Code, § 202, provides: ‘Community property passing from the control of the husband, either by reason of his death or by virtue of testamentary disposition by the wife, is subject to his debts and to administration and disposal under the provisions of Division III of this code.’ In re Estate of Coffee, 19 Cal.2d 248, 252, 120 P.2d 661, 664, interpreted this statute not to restrict the property liable for the debts and charges to that subject to the husband's testamentary disposition. It is there said: ‘For many years, the rule in this state has been that during the lifetime of a husband, the community property is liable for his debts. [Citing cases.] And section 202 of the Probate Code, said the United States District Court in a recent case [Sampson v. Welch, D. C., 23 F.Supp. 271] ‘subjects all community property passing from the control of the husband, by his death or otherwise, to administration, to his debts and to certain other charges. This is a provision more or less typical of the law in all community property states and should be construed as correlative to the principle that during the husband's life the community property is subject to his debts. Both are apparently corollaries to his right of management and control.’'
Moreover, by the very terms of the gift, appellant was first to pay all of the bills, and the attempted gift was of what was left. This gift, of the balance, for reasons already stated, may be upheld only as to one-half of such balance.
For these reasons, therefore, the entire fund is chargeable with these expenses. They should first be ascertained and deducted from the fund, and the balance divided equally between appellant and respondent.
The judgment is reversed with instructions to the trial court to amend its findings, conclusions and judgment to provide that the real property was the separate property of decedent. The court is then directed to determine (1) whether the deed of decedent to appellant conveyed the whole of her separate estate in the real property, or merely conveyed an interest to secure the advances made by appellant in repairing the property; (2) if the court should find that the decedent intended to convey her entire interest to appellant, then the trial court should so declare, but, if the trial court should find that only a security interest was conveyed, the court should find the amount of the debt so secured; (3) the court should also find the exact amount paid by appellant for decedent's last illness and funeral expenses, and should then deduct that amount from the $5,400 fund and award one-half of the balance to appellant and one-half to respondent.
PETERS, Presiding Justice.
WARD and BRAY, JJ., concur.